Charter Communications Inc. Earnings Cheat Sheet: Streak of Two Straight Quarters of Shrinking Margins Broken

Charter Communications, Inc. (NASDAQ:CHTR) reported its results for the third quarter. Charter Communications offers residential and commercial customers traditional cable video programming (basic and digital video), high-speed Internet services, and telephone services, as well as advanced broadband services.

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Charter Communications Earnings Cheat Sheet for the Third Quarter

Results: Loss narrowed to $85 million (loss of 79 cents per diluted share) from $95 million (loss of 84 cents per share) in the same quarter a year earlier.

Revenue: Rose 2.3% to $1.81 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CHTR was about in line with expectations as the mean analyst estimate was breaking even. Analysts were expecting revenue of $1.8 billion.

Quoting Management: “Charter delivered solid results in the third quarter, and I believe we have the right building blocks in place for long-term success. We are seeing the early benefits of delivering on our strategic priorities as evidenced by growth in Internet, acceleration in our commercial business and an improved customer relationship trend,” said Mike Lovett, President and Chief Executive Officer.

Key Stats:

The company has now missed analyst estimates for the last four quarters. It fell short by 90 cents in the second quarter, by 81 cents in the first quarter, and by $1.03 in the fourth quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 1.1% to $1.79 billion in the second quarter. The figure rose 2% in the first quarter from the year earlier and climbed 4.3% in the fourth quarter of the last fiscal year from the year-ago quarter.

Margins rose in the second quarter after falling the quarter before. Gross margin rose 0.8 percentage point to 56.2% from the quarter earlier quarter. In the first quarter, the figure rose 0.5 percentage point to 56.2% from the year earlier quarter.

Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the fourth quarter is 28 cents per share, dropping from 50 cents a month ago. For the fiscal year, the average estimate has moved from a loss of 15 cents a share to a loss of $1.75 over the last ninety days.

Competitors to Watch: Time Warner Inc. (NYSE:TWX), Liberty Global Inc. (NASDAQ:LBTYA), Comcast Corporation (NASDAQ:CMCSA), Mediacom Communications Corp. (NASDAQ:MCCC), Time Warner Cable Inc. (NYSE:TWC), Cablevision Systems Corp. (NYSE:CVC), Shaw Communications Inc. (NYSE:SJR), Netflix (NASDAQ:NFLX), TiVo (NASDAQ:TIVO), DirecTV (NASDAQ:DTV) and DISH Network Corp. (NASDAQ:DISH).

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(Source: Xignite Financials)